Skeletal development requires a highly complex pattern of bone formation whereby mesenchymal cells differentiate into osteoblasts, which deposit bone, and other mesenchymal cells differentiate into myocytes, which give rise to muscle, and adipocytes, which gives rise to fat. TGF-beta- related factors regulate the differentiation pathways into muscle, fat and bone, but the exact role of these factors in mesenchymal differentiation and the underlying mechanisms remain to be characterized. In this application, we propose to characterize the role of Smads, i.e. the recently identified signaling effectors of the receptors for TGF-beta-related factors, in myogenic, adipocytic and osteoblastic differentiation, using C2C12 and 3T3-F442A cells as model system. The regulation of myoblast and osteoblast differentiation by TGF-beta and BMP-2/4, and the modulation of endogenous ligand and receptor expression during these types of differentiation invite the hypothesis that alterations in Smad signaling regulate normal myogenic, adipocytic and osteoblastic differentiation, using C2C12 and 3T3-F442A cells as model system. The regulation of myoblast and osteoblast differentiation by TGF-beta and BMP-2/4, and the modulation system. The regulation of myoblast and osteoblast differentiation by TGF-beta and BMP-2/4, and the modulation of endogenous ligand and receptor expression during these types of differentiation invite the hypothesis that alterations in Smad signaling regulate normal myogenic adipocytic and osteoblastic differentiation. Our research plan to characterize the role Smad signaling in these differentiation processes is divided in three Aims. Am extensive characterization of the differential events of C2C12 and 3T3-F442A cells in culture will be pursued together with a characterization of the effects of TGF-beta and BMP-2/4 and their receptor signaling systems (Aim 1). We will then manipulate Smad signaling by increasing or decreasing signaling by individual Smads or Smad combinations, and evaluate the effects of these alterations on cell differentiation (Aim 2). Since Smads act as transcription factors, we will then study the mechanisms through which Smads regulate the expression and activities of the "master" transcription factors of these three types of differentiation, i.e. MyoD/myogenin in myogenic differentiation, PPAR-gamma in adipocytic differentiation, and CBFA1 in osteoblastic differentiation (Aim 3). Our understanding of how Smads regulate these three types of mesenchymal differentiation makes it likely that we will be able to regulate these three types of differentiation and to induce transdifferentiation between these three lineages. Our studies will form the basis of further studies on how to recruit myogenic and adipogenic cells to transdifferentiate into osteoblasts, which deposit bone matrix, in vivo. Such an ability would clearly have important therapeutic implications, since the recruitment of mesenchymal cells to differentiate along the osteoblastic lineage and to deposit bone matrix may allow increased bone formation to counteract bone loss, associated with metabolic bone diseases and age-related osteoporosis.